Predatory discounting and showrooming pose serious threats to Main Street

Saturday

Aug 9, 2014 at 5:36 PM

By Barbara Scofidio

We recently had a customer, whom we’ll call Peggy. Her daughter was getting married and the wedding had a nautical theme. She was interested in purchasing bracelets made of sailing line for the 75 female guests. These are created by a local Boston artist and sold in our store for $20.“What can you do on price?” she asked.So we tried everything to get the cost down. We were willing to take 20 percent off our profit margin and the supplier said she could take another 10 percent off her price. We looked into whether we could do thinner bracelets that would cost less, or different packaging. We went back and forth on phone and email and came up with our best deal: $14 per bracelet.Her emailed reply: “That’s just not good enough. I will go online and find something for less.”It stung. First, because we thought we had a customer who wanted to buy something from us and decided to go elsewhere. Second, because she got an idea from us and now she was searching online to try to find something just like it for less.There’s a crisis going on in retail, and this was just one example of what stores like ours face. For one, there’s an enticing array of brands and private online shopping experiences that seems to multiply every month: Joss & Main, Rue La La, One King’s Lane and hundreds more. During the 2013 holiday shopping season, their effect on brick-and-mortar stores was devastating: U.S. retailers saw approximately half the holiday foot traffic they experienced just three years ago, according to ShopperTrak.The second part of the equation, the one that scares me, is the lack of differentiation in the consumer’s eye between us and these online sites. Or, even worse, between us and the online giants. How can we possibly compete with the predatory pricing of discount sites like Amazon, which changes its pricing 2.5 million times a day?The third, which concerns me just as much, is the growing habit of consumers to test items out in real stores, then go online and try to find a better deal.The first challenge I mentioned, the dizzying array of choices that make it easy to forget a local store and much easier to shop online, is here to stay. It’s competition, pure and simple, and there’s nothing retailers can do but differentiate their own offerings and create an amazing customer experience that makes people want to come back.It’s the other two I want to talk about. Let’s start with Amazon.In Beacon Hill, where we have our other store, the mailman told us the vast majority of packages this past holiday season were from Amazon. With lovely Charles Street and its dozens of independent stores just down the hill, many residents chose instead to purchase on Amazon to the point where the postal service couldn’t even keep up with deliveries. Meanwhile, the store owners on the street are scratching their heads, trying to figure out what to do.Layer onto that the ever-more-common practice of showrooming — using stores to get ideas and try out items, then seeking them out online for less. I recently read an account of various retailers, including a luggage store in San Diego and a children’s toy store in Toronto, that have been in business for 20 to 30 years and finally closed their doors after this holiday season — not because of the recession, but because of the lack of loyalty among customers, who were using them just to experience the goods.“There is no loyalty anymore,” said one store owner. “It’s a change in people. If you go back 30, 40 years, people wanted you to succeed. Now they don’t. Maybe it’s because money is harder to come by these days.”We realize that’s exactly what Peggy was up to, but we also know that we’re fortunate to fill a special niche for local, handmade and very special products that can’t be found online. Many stores don’t, and this practice hurts them horribly.Let’s hope that store owner in the article was wrong and that people still do care, Better yet, let’s show our favorite stores in town that we do by stopping in and buying something. Sure, it might be available somewhere for less, but we love having them right here.Barbara Scofidio is co-owner of noa jewelry, fine handcrafts & gifts, at 86 Commonwealth Ave. in West Concord.